The reputation of the Bank of England's Monetary Policy Committee as a cerebral body where it is difficult to get a cigarette paper between the views of its members, let alone start a serious argument, has been reinforced by an insider's account of its monthly rate-setting meetings.
Writing in the Bank's latest Quarterly Bulletin, Richard Lambert,a former editor of the Financial Times and now one of the MPC's four external members, says: "Tales are told about heated clashes in the past, but the mood these days is rather courteous and earnest. There's the occasional joke along with the serious talk, but not much in the way of verbal violence."
The Friday before the MPC meets there is a pre-MPC gathering, at which the nine members, armed with some 500 charts and tables, are treated to a three-hour assessment of the UK and world economies by up to 100 Bank staff. "In some ways," Mr Lambert writes, "this is the most daunting moment of the month for committee members: all those numbers, all those intelligent faces."
The MPC meeting proper starts at 3pm on the following Wednesday, with the Governor and chairman of the committee, Mervyn King, seated below a portrait of one of the great governors of the past, Montagu Norman, painted by Augustus John. The format never varies: the agenda is always drawn up by the Bank's chief economist Charlie Bean, who also kicks off discussion on individual topics. Nor does the seating plan. On Mr King's right sits Rachel Lomax, the deputy governor responsible for monetary policy; on his left, the deputy responsible for financial stability, Sir Andrew Large. Everyone else has their allotted place: newcomers to the committee take the seat vacated by their predecessor. In total, there are 14 people in the room, including a Treasury representative and Bank staff to take minutes.
The opening day's discussion lasts three hours but the MPC members keep their cards close to their chests. "Members never talk to each other at any time about what they are likely to do when the votes are cast on Thursday," writes Mr Lambert. The meeting breaks at 6pm with dinner in the Bank for anyone who wants to stay. "The only rule is that monetary policy is not to be discussed."
The real business is done the following day when the MPC assembles at 9am. Each member gives their view and says how they are voting. Ms Lomax is the first to vote and Mr King the last, but in between he calls members at random. After all, it is, as Mr Lambert says, a heavy burden to bear. "Credibility takes years to build up, and could be lost in a few months."Reuse content